2006 TMA Annual Report

President's Message: "A Resounding Cry of Victory"

Our 2006 Annual Report shows that the Texas Medical Association
again enjoyed an outstanding year on behalf of the people of Texas
and their physicians.

Boy, are we spoiled. Reporting TMA's long list of achievements
each year has become a commonplace occurrence. It's what we've come
to expect.

While I encourage you to read and appreciate the remainder of
this annual report, I urge you to ask yourself, "Why?" What are the
reasons behind our success and how can we grow and cultivate
them?

I suggest you start by looking in the mirror.
You - the individual, hard-working, caring physicians of
Texas - are the source of your association's strength and
vitality.

Whether you simply belong to TMA, become involved in our
activities and programs, or take an active leadership position, you
are the reason why TMA is the largest and best state medical
society in America.

But I hope you also take a wide-angle look in that mirror. Be
sure to notice who is standing behind you. You will see the leaders
and staff of our 120 county medical societies, the TMA Alliance and
its many chapters, our state specialty societies, and the faculty
and students at our eight outstanding medical schools.

We are who we are because each of us and all of these
organizations stand in solidarity with us on behalf of our
patients.

We have many trusted leaders - many voices speaking
out for medicine - but one message. Whether it is
speaking for your county society, your state association, or the
American Medical Association; whether it is speaking as a physician
or an alliance member; whether your specialty is OB or psychiatry,
many voices ring out within the family of Texas medicine with one
message: a resounding cry of victory for our patients.

Introduction

In 2006
,
the Texas Medical Association once again proved it is there for you
and your patients. When the federal government tried to cut your
Medicare reimbursement, TMA was there. When the state's largest
insurance company decided to rate you on arbitrary and questionable
cost and quality measures, TMA was there. When state lawmakers
tried to place an onerous tax on your practices, TMA was there. And
when people who never went to medical school decided they could
perform procedures they weren't trained to do, TMA was there.

TMA was there, fighting for the rights of patients and
physicians, trying to make insurance companies treat you fairly,
teaching you how to better manage your practices, working with our
colleagues in allied health professions to better the public health
of Texas, bolstering the education of the next generation of
physicians, and enhancing your skills through continuing medical
education courses.

Persuaded Blue Cross and Blue Shield to modify its
BlueCompare physician-rating program by eliminating its "gray
ribbon" policy, agreeing to a process for verifying the
validity of its rankings, and allowing physicians to opt out of
the ranking program.

Lobbied the Texas Legislature to minimize the impact on
physicians of new state taxes passed to fund public
education.

Convinced state insurance regulators to back off plans to
make the managed care credentialing form even more complicated
than it already was.

Mounted a scope-of-practice battle by filing a lawsuit to
invalidate a Texas Board of Chiropractic Examiners rule
allowing chiropractors to perform clinical needle
electromyography and spinal manipulation under
anesthesia.

All of this was done with an eye to the future. Responding to
the priorities set by the TMA Board of Trustees, the association
followed the goals of TMA 2010, our roadmap to the future. TMA 2010
is the trustees' strategic plan to allow TMA to remain successful,
stick to our core values, and address issues affecting physicians'
ability to care for patients. Its goals are Practice Viability,
Healthy Environment, Trusted Leader, and One Voice.

With that clear vision of the future, TMA remains America's
largest and strongest state medical society, effectively
representing member physicians in nearly all venues and providing
members with quality education, information, and tools they can
find nowhere else.

Practice Viability

The power of organized medicine's voice echoed through the halls
of Congress again in 2006 as the House and Senate voted to stop the
Centers for Medicare & Medicaid Services (CMS) from cutting
Medicare fees. Thanks to your calls, e-mails, letters, and faxes to
senators and representatives, Congress blocked the 5-percent cut
that would have taken effect on Jan. 1.

Without TMA's persistence and galvanizing physicians to let
Congress know how disastrous the cuts would have been, CMS would
have imposed an across-the-board cut in all physician Medicare
payments. In addition, location-specific cuts would have added
another 1.9-percent reduction for physicians in most parts of
Texas.

The association headed off another potentially devastating
financial hit to your practice when it convinced the Texas
Legislature to minimize the impact of higher taxes passed last
summer to finance the state's public school system.

At TMA's insistence, the tax bill - which was designed
to reduce local school property taxes and replace them with a new
statewide business tax and a $1 increase in the cigarette
tax - allows you to exclude all revenues from Medicare,
Medicaid, TriCare, the Indigent Care Program, Workers'
Compensation, and the Children's Health Insurance Program from your
taxable income. You also may exclude the cost of providing any
uncompensated charity care.

TMA also helped maintain the viability of your practice by
establishing the Health Information Technology Department. The new
department:

Created a helpline to give physicians and office staff
guidance or resources to help with electronic medical records
and other office technologies. Just call (800) 880-5720 or
e-mail
HIT
.

Developed educational materials and other resources to
help physicians adopt health information technology, including
seminars, articles, white papers, Web-based tools, and an
electronic medical record implementation guide.

Healthy Environment

You need to keep your practice's bottom line as healthy as you
keep your patients. TMA physician leaders and staff worked to make
sure insurance companies pay you what they owe you for treating
patients.

Part of the effort to maintain a healthy environment for your
practice is making sure the HMOs that TMA and 19 other state
medical societies sued in a 2001 landmark federal class action
antiracketeering case live up to the promises they made when they
agreed to settle the lawsuit and change the way they do business.
Compliance actions have been robust and successful in requiring
these companies to adhere to the settlement agreements to which
they agreed. Millions have been paid to physicians as a result of
these actions.

Reacting to complaints filed by physicians, TMA attorneys and
other members of the compliance team kept a close eye on the
companies and held them accountable. As a result, Aetna, for
example, agreed to recalculate and correct payment for claims with
modifier 25 and other CPT modifiers attached to evaluation and
management codes.

TMA also swung into action in 2006 when the Texas Department of
Insurance (TDI) decided to further complicate the already complex
managed care credentialing form. As a result, TDI agreed to put the
new form on hold and ultimately made changes. "The revised form is
significantly less hassle for physicians and a win for TMA since
the association adamantly objected to the form TDI was using before
this one," said Susan Strate, MD, chair of the TMA Council on
Socioeconomics. "The changes are minimal, and many are the direct
result of TMA input."

Trusted Leader

You, not insurance companies, treat patients.
As the trusted leader of the health care team, you make your
decisions on what's best for the patient, not what's best for an
insurance company's bottom line.
That's why TMA
swung into action when Blue Cross and Blue Shield of Texas
announced it would launch the BlueCompare physician-rating program
on its Web site in January 2007. The company planned to award blue
ribbons to physicians who fall into the top 60 percent of its
quality rankings and brand with a gray ribbon physicians who ranked
in the bottom 40 percent, physicians for whom it doesn't have
enough claim forms to rate, and those who practice in specialties
for which Blue Cross has no rating system.

But after TMA raised objections, Blue Cross agreed in December
to suspend the program until a special committee of physicians and
quality experts appointed by Dr. Homer could evaluate
BlueCompare.

The committee's work and a series of meetings between TMA
physicians and staff and Blue Cross officials led to an agreement
for extensive changes in the program in early 2007. Blue Cross
agreed to:

Replace the gray ribbon and recognize physicians in its
network with a light or dark blue ribbon;

Upon request, provide physicians with their individual
information derived from the claims data used in the evaluation
process to determine their BlueCompare rating;

Implement a "robust review process" that gives physicians
an opportunity to respond to their ratings;

Allow physicians to opt out of having their BlueCompare
ribbon displayed on the Blue Cross Web site in 2007;

Retool how it communicates BlueCompare ratings to network
physicians; and

Work with an expert advisory committee appointed by TMA to
review the 30-plus BlueCompare performance measures for their
scientific basis, clinical appropriateness, and potential for
cost reduction.

TMA also took steps to maintain your role as a trusted leader by
fighting to make sure that you, a medical school graduate, are the
one making medical decisions for your patients. The association
filed a lawsuit against the Texas Board of Chiropractic Examiners
to overturn its rule that allows chiropractors to perform clinical
needle electromyography and spinal manipulation under anesthesia.
Texas law prohibits chiropractors from performing surgery and from
diagnosing physical diseases, disorders, deformities, or injuries.
The case is still making its way through the courts.

TMA also worked to maintain physicians' trusted leader position
by:

Establishing the TMA Patient Safety Resource Center with
materials on patient safety for physicians, joining the
national 100K Lives patient safety campaign, and adopting three
goals to help improve Texas patients' outcomes: preventing
surgical site infection and related deaths by reliably
implementing a set of recommended interventions for all
surgical patients, preventing deaths among patients
hospitalized for acute myocardial infarction by ensuring the
reliable delivery of evidence-based care, and preventing
adverse drug events through medication reconciliation.

Building the Texas Public Health Coalition, a collection
of organizations that share an interest in advancing core
public health principles at the state and community
levels.

Holding the physician-led
Healthy Vision 2010
summits, which resulted in the adoption of 24 proposals to
reduce the number of uninsured Texans and increase the use of
community- and employer-based wellness programs. The proposals
formed the heart of a joint legislative agenda.

Persuading the American Medical Association to adopt a
Texas resolution calling for an enforceable and efficient
influenza vaccine distribution system that gives priority for
early shipment to physicians and other health care
professionals who care for high-risk populations. AMA and two
pharmaceutical companies later announced that physicians will
have first priority for almost 2 million doses of FluArix
influenza vaccine this fall.

Organizing a three-day trip to Washington, D.C., by 17
Border Health Caucus physicians to draw attention to the
special health care problems that plague the Texas-Mexico
border.

Funding by the Texas Medical Association Foundation of
nearly $350,000 in physician-led public health improvement
programming, including Be Wise - Immunize
SM
, Hard Hats for Little Heads, and the Ernest and Sarah Butler
Awards for Excellence in Science Teaching, as well as numerous
health improvement initiatives of TMA's county medical
societies and alliance and medical student chapters.

Using the lessons learned from hurricanes Katrina and Rita
in 2005 to develop a disaster preparedness plan.

One Voice

The strength in the voice of medicine in Texas comes from our
close working relationships with county medical societies. TMA
worked closely with county societies to tap into the membership
strengths at the local level. TMA supported the recruitment and
placement of membership directors in both the Dallas and Harris
county medical societies for recruiting and retaining members in
those growing markets.

County societies now benefit from remote access to the TMA
membership database. This also allows medical society staff to
assist in maintaining physician contact and group information to
ensure greater accuracy for all users.

TMA's high-tech wizards implemented new ScanTron technology,
which allows you to make sure your membership contact information
is up to date and to complete a short survey so that the
association can better meet your needs.

The technology team also wrote software that tracks information
regarding physician phone calls, which helps TMA keep its pulse on
the needs and concerns of Texas physicians, including the ability
to better target membership communications and to aid in the
legislative and regulatory arena.